BULLETIN NO.: MGR-96-066
TO: All Reinsured Companies
FSA Headquarters, Program Delivery and Field Operations
All Risk Management Field Offices
FROM: Kenneth D. Ackerman
Acting Administrator
SUBJECT: 1997 APH Yield Adjustments for Peaches in Selected
States
BACKGROUND:
During 1996, the peach crop in certain States was severely damaged
by freezing temperatures. Peach production was less than would have
been experienced under normal growing conditions for several major
producing States. Due to this freeze, the Federal Crop Insurance
Corporation (FCIC) explored potential methods for adjusting crop
insurance yields for these producers.
ACTION:
For the 1997 crop year only, in the States where peach insurance is
available, FCIC will administratively implement the following Actual
Production History (APH) yield adjustments for peach producers:
1 A 10 percent yield cup. Approved APH yields may not decrease
by more than 10 percent compared to the previous year's
Approved APH yield, unless known tree damage has occurred or
cultural practices have been performed that will reduce the
insured crop from previous production levels. A 5 percent
premium surcharge will be required ONLY when the 10 percent
cup is applied. (See attached examples.)
2 Waive use of the yield variance table for carryover insureds.
The yield variance table is used to determine if a unit
requires a field inspection and/or approval of the APH yield
by the FCIC Regional Service Office (RSO).
3 For new insureds, mitigate the number of inspections and RSO
approved APH yields that would be caused by low 1996 actual
yields when using the yield variance table. For new insureds,
low actual yields reported for the 1996 crop year WILL NOT be
counted for yield variance table purposes. (See attached
example.)
Attachment
PEACH EXAMPLES
CUPS/PREMIUM SURCHARGE
Example 1, Carryover Insured:
The 1996 approved APH yield was 192, 90 percent of that yield
(Cup) = 173. The actual average APH yield is 166. In this
example, the 1997 approved APH yield is cupped at 173 and a
5 percent premium surcharge applies.
1997 APH FORM
Year Acres Yield
1992 24.8 51
1993 24.8 236
1994 22.5 305
1995 23.4 232
1996 23.4 6
830/5 = 166
An inspection and an FCIC RSO approved yield are NOT required.
Use of the yield variance table is waived for carryover insureds.
Example 2, Carryover Insured:
The 1996 approved APH yield was 187, 90 percent of that yield
(CUP) = 168. The actual average APH yield is 174. In this
example the 1997 approved APH yield will be 174. Since the cupped
yield was not applicable, the 5 percent premium surcharge does
not apply.
1997 APH FORM
Year Acres Yield
1992 105.5 104
1993 105.6 140
1994 96.7 348
1995 99.9 271
1996 99.9 6
869/5 = 174
Example 3, New Insured:
1997 APH FORM
Year Acres Yield
1992 46.8 345
1993 46.8 322
1994 44.0 124
1995 42.2 116
1996 42.2 16
923/5 = 185
Since this is a new insured, use of the yield variance table is
required. Disregarding 1996, the unit still has two actual
yields (1994 and 1995) that are less than 75 percent of APH
average yield. An inspection and an FCIC RSO approved APH yield
ARE required.